(Sharecast News) - Prime Minister Theresa May on Thursday dismissed a media report the government is planning for the UK to stay in the European customs union after 2021.With Britain's divorce from the European Union in March of 2019 looming, a transition deal running until December 2020 has already been secured for the country to get its affairs in order before exiting the customs union.

Speaking on the sidelines of an EU summit in Bulgaria, May denied she was climbing down from plans to exit the EU completely.

"No. The United Kingdom will be leaving the customs union as we're leaving the European Union. Of course, we will be negotiating future customs arrangements with the European Union and I've set three objectives," she said.

While the UK still needs a permanent deal for the period post-2020 to exit the block, ministers must also avoid a hard Irish border following the country's withdrawal from the EU, as part of the Good Friday agreement.

Drawn up as part of the Northern Ireland peace process, the pact requires a border referendum to be called if it appears likely that a majority in Northern Ireland would vote to join the Republic of Ireland, which the formation of a border poll is thought likely to trigger.

Yet May's Cabinet remains deadlocked over what is the best trading arrangement for the country after it leaves the EU and on how to avoid a hard border.

As a backstop, some ministers had tabled - and May had accepted - the option of the UK remaining within the customs union past 2021 should alternatives not be in place by then, according to UK media reports/.

Arch Brexiteers Boris Johnson and Michael Gove, were "outgunned" at the meeting and while they voiced their objection they too had finally accepted The Telegraph reported, citing an unnamed pro-European Cabinet source.

Ministers are likely to propose it formally to European negotiators in Brussels in the coming weeks, Bloomberg reported.